Last post on Oct 11, 2006 at 10:27 AM
You are in the Chevrolet Malibu
What is this discussion about?
Chevrolet Malibu, Chevrolet Malibu Maxx, Chevrolet Malibu SS, Car Warranties, Hatchback, Sedan
#12 of 31 Re: All this discussion about extended warranties is making me nervous... [csandste]
Mar 11, 2005 (4:13 pm)
well, assuming I wasn't lied to (imagine that), he is making $100 on the deal, and has to turn the rest of the money into GM. That would not be a 100% markup. It also tracks with what the good folks up at Black's are saying. I guess only an insider at GMPP could tell if this is true.
As far as the coverage, go to the GMPP website and look for yourself. While it does make sense to wait for the last moment, my "moment" is less than 1,300 miles from today. That is only one month's worth of driving, and isn't worth worrying over whether I can get in touch with the finance manager at the last moment. It is close enough to the 12k miles that I went ahead and did it.
#13 of 31 All this discussion about extended warranties is making me nervous...
Mar 11, 2005 (4:06 pm)
Since they're marked up by the dealer--100% at least, is there something about the reliability of these cars that's suspect?
#15 of 31 Here's a credit union take on extended warranties...
Mar 11, 2005 (9:05 pm)
"A typical buyer of an extended warranty (also known as a service contract) pays about $1,000 but only collects on some $250 in repairs over the life of the contract, according to Checkbook magazine, a consumer publication that also operates Car Bargains car-buying service. "From a straight financial perspective, extended warranties don't make sense," says Robert Ellis, director of operations for Car Bargains. He, along with many personal finance experts, advises paying for repairs out of your savings if you are able--thus avoiding both dealer markup on the contract and the likelihood you will never get your money back in covered repairs....
Consider mechanical breakdown insurance
Sold by insurance agents and some credit unions, these contracts--often $500 or less for new-car coverage up to six years or 100,000 miles--cost about half what a dealer will charge you for a typical extended warranty. And mechanical breakdown insurance, or MBI, usually lets you go to the repair shop of your choice; dealer-sold warranties limit repairs to dealers of that brand and sometimes even the specific dealership where you bought it. MBI, unlike dealer warranties, also is regulated by many state insurance departments for another possible source of protection. Depending on your contract, MBI may cover only major mechanical components."
#16 of 31 Is it really worth it?
Mar 12, 2005 (9:06 am)
I don't really think Extended Warranties are worth it. None of my vehicles have had problems between the 36k where the warranty expires and the 100k miles where most extended warranties end. Even after the 100k miles the cost doesn't add up to the $1000 an extended warranty costs. I have a 96 S10 that has 150k miles on it, I've spent ~$900 for two repairs (leaky fuel injector, and air compressor) but both were after well over 100k miles. This is my take: most vehicles have a bug or two after you first get them (under warranty), then they are set until things start wearing out, which doesn't usually happen till after 100k miles.
#17 of 31 Actually I've only purchased one and that WAS worth it...
Mar 12, 2005 (9:27 am)
It was a 1986 Ford Tempo, the very worst car I ever had. The Ford guarantee was that if you paid for anything once it was covered--never knew so many things could go out once.
Since then, I've passed, after learning about the huge markups. I always heard that the dealer got 50% and the manufacturer kept the other half. As you can see from the report, they only pay about 25% out on the dollar. I think they wanted to sell me one for $800 when I bought my MAXX. Said it was the same cost that they passed along to their employees. At the risk of putting a curse on my car, I passed. When slot machines pay out at 90% plus, and lotteries pay out at 50%, a payout of 25% is a pretty bad deal.
Statistically you'd do twice as well going down to the c-store and buying $1000 worth of scratch game tickets.
#18 of 31 $800?.....
Mar 12, 2005 (1:37 pm)
....for a GMPP? I doubt it. I'm amazed how some dealers are pushing their secondary warranty companies which is what I suspect this was. If you think it was GMPP, pass me your dealers name. With GM's "fine reputation for quality" I don't think it is unreasonable for a person to consider an extended warranty for a brand new Malibu considering it has a redesigned engine (3.5 up from 3.4), a new platform, a tranny which had the wrong parts in it from the getgo, and a totally new chasis. Oh, and did I mention the electric steering?? As the one posted article pointed out, if you plan on keeping it a lot more than 4 years, it might be for you. To counter the one post regarding reliability after the 3/36,000 mark, my 626 required $3,500 in repairs from the 3/50,000 mark until year 8. Needless to say, I was very glad I purchased one for that car. Despite paying only $19,100 for my Malibu after tax, there still is nothing coming out this summer or next which makes me question my 'Bu purchase. I absolutely love the car, and will be keeping it until the blue/green smoke billows out the back tailpipe. As the posted article said: it makes sense for owners like me.
#19 of 31 Extended Warranties - FYI
May 31, 2006 (7:02 am)
After my last car purchase a few months ago I was put under alot of pressure to buy the extended warranty first by the salesrep then I was was shuffled off to a financial guy to get more presssure, of which I refused several more times.
They finally realized I wasnt going to buy it and we finished the deal on the car. I've never purchased exteneded warranty on any car I've ever bought.
The following is an "opinion" as found on:
Extra pressure on extra warranties.
Since we warned buyers to stay away from most extended service contracts six months ago, Lemon-Aid has learned that automakers are increasing the pressure on their dealers to sell their plans on new vehicles.
Three years ago, almost one-third of cars sold carried these extended contracts, however, last year barely twenty percent of new cars had this option, with many plans sold by independent companies offering dealers higher profits.
Automakers want this lucrative business back. For example, each plan sold to the dealer for $1,400, gives GM a $600 profit, with about $700 set aside for claims, and $100 reserved for administrative costs. The dealer profit comes from the dealer’s markup.
Lemon-Aid’s bottom line: buyers should shun vehicles that require the extra protection.
Beware of Worthless Auto Warranties.
Lemon-Aid tells you which new and used vehicles need an extended warranty. Nevertheless, car buyers are often offered bogus $2,000 extended warranties as extra protection when they buy a new or used car.
These warranties promise the buyer several extra years of warranty coverage, either for the entire vehicle or the powertrain. Owners feel protected and dealers rake in a 60-80 percent profit on each plan they sell.
Most of the time, these extra warranties are a bad deal for the following reasons:
- Only the most problem-prone vehicles (American front-drives) need this extra protection. This forces the question: why are you buying an unreliable car in the first place? Most of the common engine and transmission defects are covered by free, “goodwill” extended warranties (Chrysler, Ford, GM, Honda, and Toyota). Factory defects are covered by local consumer protection laws enforced by small claims court judges.
- Many extended warranty providers go out of business and dealers claim they aren’t responsible.”
This denial of responsibility by dealers isn’t working. Canadians are getting refunds in small claims courts and American consumers, scammed by the recently failed National Warranty Insurance Co., have filed class action lawsuits against dealers in California, Texas, Nevada, and Illinois. The lawsuits allege that dealerships took part in a scheme to profit from selling customers worthless service plans that resulted in $100 million in losses.
#20 of 31 Re: Extended Warranties - FYI [shadow5599]
Jun 07, 2006 (6:57 pm)
Amen to everything you said. If it wasn't a cash cow you wouldn't have to fight your way out of the finance guy's office. The only extended warranty I've ever purchased was on a 1986 Ford Tempo. Seems I guessed right on that one since everything on the car broke once (Ford had that fix it once guaranteed for life schtick). Since then I've taken my chances and never had a repair that would have meant it was a good deal. Biggest rip... Hyundai's extended warranty that pushed the entire car out from 60,000 to 100,000 miles. A thousand bucks or so to extend the non-power train out 40 thou. Had an Elantra for 80,000 miles with no out of pocket expenses other than a lost gas cap replaced with an AutoZone unit. $130 to replace the cap with a factory unit and read the codes... odd since I'd used the other cap for 20,000. That experience made me leave Hyundai and come back to GM-- good car, bad dealer.
As far as pushing extended warranties, they must see the suckers coming....
#21 of 31 Extended warranty on 04 Maxx LS
Aug 01, 2006 (8:06 am)
I am in the process of purchasing a 04 Maxx LS. Should I spend the bucks to buy and extended warranty plan? Your thoughts will be appreciated.